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    Stewart Investors Global Emerging Markets Leaders Fund

    In Short

    NameStewart Investors Global Emerging Markets Leaders Fund
    Asset ClassEquity
    GeographyGlobal Emerging Markets
    Theme/Sub-class-
    NordSIP CategoryCore/Impact
    Article 8/9Article 9
    Fund ProfileAvailable here
    Hållbarhetsprofilen-
    Morning StarAvailable here
    Product/StrategyIreland-domiciled UCITS
    ISINIE00BFY84Z77
    AvailabilityInstitutional investors in Europe and Canada
    ManagerLead PM: Jack Nelson; Co-PM: David Gait

    Strategy description

    The Fund seeks to achieve long-term capital appreciation by investing in companies which both contribute to, and benefit from, sustainable development, achieving positive social and environmental sustainable outcomes.

    Positive social sustainability outcomes include the enablement of improved health and wellbeing; access to income-generating and enterprise opportunities; fair employment and workplace safety; access to education and learning opportunities; communication and access to information; financial inclusion; sustainable transport and mobility; better access to housing, water, sanitation and electricity; and social inclusion and reduced inequality.

    Positive environmental sustainability outcomes include more careful, efficient and productive use of natural resources; reduced waste and improved waste management; the wider adoption of circular economy practices and measures; the adoption of renewable and cleaner energy technologies; reduced greenhouse gas emissions; reduced water, air and other environmental pollution; a slowing in the rate of land degradation, land use change and loss of forests and biodiversity; and measures and technologies that enable climate change adaptation and resilience.

    The hallmarks of our investment strategy are an exclusive focus on companies that contribute to and benefit from sustainable development; a research-driven, fundamental, bottom-up approach to the selection and ongoing analysis of investments; a focus on the quality and sustainability attributes of every company; a focus on company stewardship and sound governance; a long-term investment horizon; and a commitment to engagement in order to address sustainability concerns and issues.

    SRI Highlights

    Stewart Investors includes 11 investment professionals based in Edinburgh, London, Singapore and Sydney. Team members’ experience level ranges from several decades through to recent graduate hires. The team’s current industry experience average is 15 years, and tenure with the team averages 10 years. Sustainability is core to our investment philosophy and integrated into our investment process. ESG and sustainability analysis and engagement/voting are fully integrated into the role of each team member.

    The investment analysts are responsible for all company analysis including ESG, identifying engagement priorities, monitoring and engaging investee companies and making all voting decisions. All members of the investment team – investment analysts and portfolio managers – are ESG/RI specialists. Everyone on the investment team is first and foremost a company research analyst. Portfolio managers are analysts with additional responsibilities. Every member of the team performs a generalist analyst role and is encouraged to participate in the generation of ideas for all portfolios.

    The investment team receives support from our Impact Communication and Engagement team (ICE) who support the investment team with regulatory and operational activities relating to ESG and RI, this includes support to monitor and report on engagement, voting, sustainability and impact reporting. The function allows the investment team to remain focused on investment-related activities while ICE provides the supporting resources to meet the growing demands from clients, consultants, regulators and other stakeholders.

    Reporting
    The Stewart Investors strategies available to European clients are aligned to SFDR Article 9 and we will report in line with these requirements.

    Portfolio Explorer provides (updated quarterly on the website) the sustainability positioning of the companies we invest in across our regional and global strategies. Each company is mapped to Project Drawdown climate solutions, human development pillars and the Sustainable Development Goals. For each company we also provide our investment rationale, sustainability positioning, risks and areas for engagement.

    Fund-level ESG/Sustainability reporting, outlining how the portfolios are contributing to social and environmental sustainable outcomes is also available on our website

    Currently Sustainalytics and RepRisk are our main external providers of ESG data – we use these services to validate our own in-depth analysis of companies. We also use ISS for carbon foot printing and CDP for emissions data. ISS scenario reports are available to clients on request to meet our reporting obligations but are not used as part of the investment process. In addition, we use Net Purpose for impact and company level climate change targets data.

    Competitive Advantage
    The following factors differentiate us from our competitors.

    Experience
    First sustainability strategy launched in 2005

    Long termism

    • Some companies held > 20 years
    • Ten-year horizon at point of investment
    • Engaged relationships with investee companies

    Positive impact

    • Companies must contribute to sustainable development
    • Sustainability analysis is integral to the investment process
    • Engage and vote to improve sustainability outcomes

    Performance

    • Strong long-term absolute returns across cycles
    • Significantly lower downside risk

     

    Exclusions

    International Norms: companies whose activities clearly infringe international agreements and which are complicit in human rights abuses (following the UN guiding principles and OECD guidelines).

    Fossil fuel / Thermal coal: companies that derive over 10% of their revenues from the extraction of thermal coal, oil and gas companies whose production derived from oil sands is 1% or more of total production and extractives companies undertaking exploration and production activities in sensitive areas.

    All Weapons including Anti-personnel mines, Cluster munitions, Nuclear, Biological & Chemical Weapons

    Tobacco: companies that derive any turnover from the manufacture of tobacco products or derive 10% or more of turnover from the sale of tobacco products.

    Gambling: companies whose core business is gambling, such as casinos or derive 10% or more of their total revenues from gambling, such as hotels or restaurants.

    Pornography: companies involved in the production or distribution of pornographic materials or retailers that derive more than 3% of turnover from the sale of such material.

    Alcohol: companies that derive any turnover from the production of alcoholic beverages, that derive over 33% of turnover from selling alcohol or derive over 10% from bottling, wholesale or sale.